Reading last week about Going Places’ plans to consolidate their agency network and the recent publicity surrounding the death of several travel dotcoms, got me thinking.
With the apparent contraction of travel agency outlets, who might fill the space? Existing on- and off-line players certainly, increasing their business volumes whilst striving to reduce overheads. However, I also see a growing competitive threat from a so far unpublicised sector, that of tourism. I believe tourism organisations are set to tread on agents already well-bruised toes. I will explain why.
Destination marketing organisations, DMOs, have traditionally competed with each other through provision of information; compiling accommodation directories, issuing attraction and event brochures and, generally, doing their best to ensure that tourists have all the information needed to be attracted to their part of the globe.
Tasked with promoting their product across the world, DMOs achieved this pre-Internet by the hugely expensive distribution of paper-based information. Paper has not yet gone away, but the Internet is the ideal medium for global information distribution.
DMOs have responded by building comprehensive presences on the Web. Shop windows for their product that can cost efficiently provide far, far more information than any paper based distribution system. However, as well as information dissemination, DMOs have always served a second purpose. That is to facilitate transactions between their bed-stock providers and tourists.
Increasingly, tourists are expecting to be able to transact from the same on-line site that provides destination information. DMOs have responded by further developing their on-line Destination Management Systems (DMSs) to facilitate transactions between their bedstock providers and tourists. These system developments need funding and DMOs, being public sector organisations, typically never have enough money. So the forward thinking have been entering into public/private partnerships to develop the necessary systems. As these business entities have a private element they need to be run at a profit and may charge their product providers a small fee, perhaps a commission.
Take a look at www.zurichtourism.ch
or the Austrian, German, Swiss TIScover system at www.tiscover.com
and see for yourself the awesome capability of these systems.
Moving the argument on, why wouldn’t DMOs also provide a transport booking capability? Tourists need to move around, how about providing car rental bookings? DMOs are slowly climbing the ladder of increasing booking capability. They are becoming the specialist destination travel agents of the future. They have amassed destination information databases with which very few travel agents could compete. They have established close relationships with local bed-stock providers. They have invested in comprehensive DMSs with online booking capability. They are sought out by travellers and tourists as an authoritative and comprehensive resource of destination information. I believe that they will one day prove formidable competitors to travel agents who never even realised that they posed a threat.